Business sentiment at lowest level since 2009

Korean companies are at their most pessimistic since the 2008 global financial crisis, according to survey results from the Korea Economic Research Institute (KERI).

A non-profit research body under the Federation of Korean Industries, KERI surveys the country’s top companies by revenues each month to ask about their short-term outlook on the economy and then releases the “Business Survey Index.”

The August index was based on responses from 416 companies.

Collected in mid-July, the outlook index for August was 80.7 points. A reading above 100 points indicates that a majority of survey participants have a positive outlook on the economy, while a reading below 100 indicates that most have negative views.

The most recent reading was the lowest since March 2009, when it hit 76.1 points following the crisis.

Manufacturing companies were much more pessimistic than those in non-manufacturing sectors. The index for the former was 74.7 points, 14 points lower compared to non-manufacturing companies. The ongoing U.S.-China trade war, Japan’s trade restrictions and low demand linked to the slow economy were major factors cited behind the negative outlook.

August has generally been a month of pessimism, KERI said, due to summer vacations leading to fewer work days. But the month-on-month decline from July to August this time was unusual.